DENVER—Federal officials are looking at options for setting royalties for commercial oil shale development, including implementing sliding-scale royalties or giving the interior secretary authority to set a higher rate than a 12.5 percent minimum rate if it’s deemed appropriate.

The Bureau of Land Management announced the options Friday as it finalized decisions making about 1,060 square miles in Colorado, Wyoming and Utah available for research and development leases on how to economically turn oil shale into oil. The decision also makes roughly 200 square miles in Utah available for leasing for commercial tar sands development. Companies with the leases would have to prove their research before converting them to commercial leases.

The public has 60 days to comment on four proposed options for setting royalty rates.

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